The satellite industry is undergoing a seismic shift. With the meteoric rise of Starlink, the tech world’s version of Goliath, smaller players like Avanti Communications find themselves navigating a rapidly evolving landscape they have dominated for decades.
But with change comes opportunity, and Avanti Communications CEO Kyle Whitehill believes that by embracing a new era of satellite communications leveraging flexible geostationary (GEO) satellites and in-orbit services allows them to evolve with market demands.
Whitehill explains, "We are moving away from the old model of large-scale satellite investments with uncertain returns. Instead, we are focusing on strategic deployment and partnerships to ensure maximum efficiency and adaptability."
Once considered a niche market, the satellite industry has become a battleground with Starlink’s arrival. Initially, Elon Musk’s brainchild appeared to focus on providing rural broadband in the United States, but it rapidly expanded into sectors like aviation, maritime, and military communications.
"Then they turned up in Ukraine. They've been supplying the UK military with capacity for four years," Whitehill notes.
This unexpected expansion has fuelled intense price competition, putting pressure on traditional GEO satellite operators. "They were pricing significantly below what traditional GEO satellite operators had been doing," Whitehill explains. As a result, many operators have struggled to justify the launch of new GEO satellites, leading to a sharp decline in orders.
Historically, 25 to 30 GEO satellites were ordered annually, but by 2024, that number has plummeted. With industry reluctance to invest in large, expensive satellites without guaranteed returns, Avanti has pivoted towards partnerships with low Earth orbit (LEO) providers like OneWeb. In regions such as South Africa, Avanti is delivering hybrid connectivity solutions that integrate both GEO and LEO technologies to optimise coverage and performance.
Whitehill remains confident in the enduring value of GEO satellites. "They're still fantastic for broadcast media, maritime, and in-flight connectivity," he affirms.
Avanti has pivoted towards “flexible GEO” satellites. Unlike traditional satellites that provide broad but often under-utilised coverage, these flexible satellites deliver targeted capacity where it is most needed. This approach ensures cost efficiency while effectively meeting demand in high-traffic regions.
Whitehill notes that the industry has shifted towards more transparent and realistic pricing and believes we will see further consolidation within the satellite sector.
As LEO constellations like Starlink and Amazon’s Project Kuiper reach full deployment, the market is becoming increasingly saturated. In this evolving environment, smaller operators may struggle to compete, leading to mergers and acquisitions that will result in fewer, but larger, players dominating the industry.
Financial pressures and market volatility
The financial landscape of satellite communications is also undergoing significant shifts. Last month, Eutelsat Communications experienced a dramatic drop in its share price.
"Eutelsat announced a few weeks ago that they were relocating a satellite due to bad CapEx decisions. Their share price plummeted, taking them from a 2-billion-euro market cap company to just 600 million euros," Whitehill explains.
Market rumours can also drive wild fluctuations. "When an announcement surfaced about the U.S. government potentially withdrawing Starlink from Ukraine and mentioning OneWeb, share prices tripled," he adds.
The Impact of AI
Like every other sector, AI is a hot topic in the satellite industry. Whitehill highlights that some companies, such as Neospace in Saudi Arabia and Space 42 in Abu Dhabi, are integrating AI into their operations to enhance service offerings.
"Satellites generate vast amounts of raw data that require analysis, and these companies have bolted AI services onto their platforms," he says.
Avanti is also adopting AI to improve business efficiency. However, Whitehill does not foresee AI significantly impacting employment. "The world has reinvented itself many times with the introduction of new technology, and it always creates new opportunities," he comments.
What does the future hold?
Whitehill believes the satellite industry will look vastly different in five years. Many satellites ordered seven to eight years ago are set to launch within the next three to five years, adding significant capacity—some exceeding five terabits. Meanwhile, Starlink will be fully deployed.
"You’re going to have a highly competitive marketplace, which is great for customers because there will be plenty of credible choices," he says.
Looking ahead a decade, Whitehill anticipates even more consolidation. "I question whether smaller companies will have a place in the market. The number of major satellite operators will continue to shrink."
He also weighs in on the growing direct-to-device market, which aims to integrate satellite and mobile communications. "There is a ton of CapEx going into that market right now, and every major mobile operator is talking about it. But I’m a little sceptical about its potential."
"In the next 10 years, I see bigger LEO players dominating, with the mobile industry becoming much more integrated with the satellite sector," he concludes.
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